Jakarta (ANTARA) - The Government Regulation in Lieu of Law (Perppu) Number 2 of 2022 regarding Job Creation has revised the provisions on minimum wage, including the formula for its calculation, the Manpower Ministry has said.
The Perppu introduces substantial changes, director general for development of industrial relations and social security (PHI and Jamsos) at the ministry Indah Anggoro Putri said at a virtual press conference on Friday.
"In this Perppu, it is also mentioned that there will be an improvement in the minimum wage formula. Later, we will explain the details (of the change) in the revision of the PP (Government Regulation) Number 36," she informed.
Earlier, the calculation of the minimum wage was based on PP Number 36 of 2021 concerning wages. With the issuance of the Perppu, the PP will be amended, the director general said.
The Perppu concerning Job Creation, which was issued on December 30, 2022, prescribes a wage calculation formula by considering three variables—economic growth, inflation, and certain indexes.
The change aims to provide a more adaptive formula for calculating the minimum wage. Another change in the Perppu involves a requirement for local governments to set the district/city minimum wage (UMK) if the calculation of the UMK is higher than the provincial minimum wage (UMP), Putri noted.
Furthermore, according to the Perppu, if certain circumstances arise, the central government will have the authority to change the minimum wage calculation formula determined earlier.
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The new provision aims to provide a legal basis for the government to address certain conditions that can affect the sustainability of the business sector. In addition, the Perppu allows the central government to set the minimum wage for a region that is still recovering from a national disaster.
"Thus, it is not true that the Perppu gives back the (complete) authority to the central government -- (in this case to) the Menaker (Manpower Minister) -- to determine the wages for all regions in Indonesia," the director general said.